AG Recovers $335M in Medicaid Fraud in 2012

ALBANY -- The state recouped $335 million in Medicaid funds in 2012 that had been obtained or spent fraudulently, the highest recovery in seven years, the state attorney general's office announced Wednesday.

Included in the recovery sum is a $146 million settlement from pharmaceutical company GlaxoSmithKline, which had illegally marketed and priced its drugs. It was part of a $3 billion multi-state settlement, Attorney General Eric Schneiderman said.

Investigators from the attorney general's office also shut down a scheme where fraud offenders were distributing black-market HIV drugs through a pharmacy in Suffolk County and then billing Medicaid for more than $155 million, he said.

"Part of my first major initiative when I took office was to bolster the Medicaid Fraud Control Unit with additional prosecutors, investigators, and auditors, in order to even more aggressively root out fraud and return money illegally stolen from New York taxpayers and their government," Schneiderman said in a statement.

Medicaid, the health-insurance program for the poor and disabled, is the most expensive piece of the state budget. The state expects to spend $58 billion on the program in the 2013-14 fiscal year, which starts April 1. That spending represents a 6.7 percent increase from the current fiscal year, Gov. Andrew Cuomo said in his budget address Tuesday.

Cuomo said 5 million people receive Medicaid-eligible services each month through a network of more than 60,000 health care providers.

Schneiderman's office recovered another $9.9 million after prosecuting four New York City pharmacists and a pharmacy owner who billed Medicaid for drugs they had not dispensed to patients.
The attorney general agreed to a $3.1 million settlement with Cayuga Medical Center for billing Medicaid and federal programs for patients referred by doctors who had financial ties to the hospital.

The state also recovered $1.6 million for excess Medicaid payments on claims for dental services provided by Kaleida Health through the Buffalo Women's & Children's Hospital Dental Clinic.

The office cracked down on other fraudulent criminal operations, such as drug traffickers in Staten Island and the Bronx who were dealing narcotics and prescription drugs that were obtained through Medicaid and other insurers. Ringleaders in these schemes received prison sentences, Schneiderman said.

The office targeted Medicaid providers that billed for unnecessary services or multiple visits for services that could have been performed during one visit. Providers were also found to have referred patients to unlicensed facilities in exchange for kickbacks.

"My office's Medicaid Fraud team will keep working hard to root out fraud wherever it exists, and protect the integrity of the Medicaid program for those who truly need it," Schneiderman said.